The Arab revolts in Egypt, Syria and Libya have not turned out happily, which leaves Tunisia as the last source of potential optimism in the region. None of the social aspirations that sparked its December 2010 uprising have been fulfilled. But after a long political crisis, and the assassinations of two leftwing members of parliament in six months (1), Tunisia has a new constitution, approved by 200 of its 216 parliamentarians, and a technocratic government of national unity. Tensions have eased and there is relative calm.

Opponents of the Islamist Ennahda movement feared it would become entrenched in the state apparatus, leading back to dictatorship. But Ennahda left office as peacefully as it came, having been politely invited to “withdraw” by the International Monetary Fund, Algeria, western countries (including France), the powerful union confederation, business leaders, the revolutionary left, the centre right, the Human Rights League…

It presumably yielded to pressure in the knowledge that its record was shabby and the international environment unfavourable to the Islamists (ousted militarily from the Egyptian presidency, discredited in Turkey). Article 148 of the constitution stipulates that a fresh election must take place in Tunisia before the end of 2014. Revolution is off the agenda, but the country may again be starting to think that some measure of happiness is achievable in an Arab world where it is in short supply.

Was bringing the Islamists into the political fold a gamble that paid off? Yes for those who maintained that their coming to power would not be irreversible. Yes also for their enemies, who predicted that once they were in power, they would reveal their obsession with identity and religion, and the limitations of their economic and social policy. “With [the Islamists] we are pre-Adam Smith and David Ricardo,” Hamma Hammami, spokesman for the leftwing Popular Front, told me. “The Muslim Brothers’ political economy is a rent-based economy; it’s about parallel trade. It isn’t about production, or wealth creation; it isn’t about agriculture, industry or infrastructure; and it isn’t about reorganising education for strategic aims, whether economic, scientific or technological.”

The weak point is the economy

It is clear that a “development model” (to borrow a term from Ennahda’s 2011 election manifesto) requires more than empty slogans — “creating new markets for our goods and services”, “simplifying procedures”, “diversifying investment to more useful projects” — and pious calls for “reviving virtuous values derived from the cultural and civilisational heritage of Tunisian society and its Arab and Islamic identity, which honour effort and fine work, encourage innovation and initiative and reward creative people, and entrench cooperation, solidarity and mutual support” (2).

Houcine Jaziri, a member of the last two Islamist cabinets, acknowledged this: “Ennahda’s weak point is the economy. We got more caught up in moral questions. We have too many politicians in our ranks and not enough economists. Others have worked on these issues much more than us … We were fortunate in having to think about these things when we became part of the government.”

Rightly so. But for the past three years, the attention of most Tunisian parties, not just Ennahda, has been elsewhere. “The stormy political times we’ve been through”, said economist Nidhal Ben Cheikh, “were notable for the discussion of subjects that are relatively taboo in Tunisia: religion, belief, the sacred, sexuality, homosexuality, the role of women. The fundamentals of our political economy, however, have never been debated, let alone questioned. As a result, the governorates [provinces] where the revolution — the political and social uprising — took hold, Kef, Kasserine, Siliana, Tataouine and Kebili, are still suffering from an appalling lack of local economic activity” (3).

The head of the present anti-Islamist coalition, Beji Caid Essebsi, has also been in the post-Ben Ali government. Rather than capitalise on his own popularity and the enthusiasm of the first few months (with all the talk of a Jasmine Revolution) to sweep away his predecessor’s neoliberal policies, he surrounded himself with orthodox ministers who preserved the old economic model, to the delight of the IMF (4). Consequently, Caid Essebsi acknowledges, “in some regions which have been marginalised for a very long time because there’s been so much more focus on the coastal regions, there has been no improvement.”

Since 2011 there has been no deviation from course: integrating Tunisia into the international division of labour by offering foreign investors a skilled workforce and miserable wage levels. This model can only perpetuate the huge regional inequalities. It doesn’t offer development that prioritises the country’s own needs, driven by state investment and sustained by local demand that isn’t fuelled by debt. So the grey economy and smuggling are likely to grow (reducing tax receipts), the state to roll back and jihadist cells to exploit the situation. “The US, that great advocate of neoliberalism, allowed the nationalisation of its banks [in the crisis in 2008], but Tunisia in its revolutionary period ruled out revolutionary measures,” said Ben Cheikh ruefully.

Meeting Rachid Ghannouchi, the leader of Ennahda, and Caid Essebsi, the founder and chairman of Nidaa Tounes (Call of Tunisia), highlights the absence of bold policy-making in contemporary Tunisian politics. On the surface, these veterans who dominate the political landscape have nothing in common. Ghannouchi’s HQ is full of photos of him with Islamist leaders and intellectuals (Tariq Ramadan, former Egyptian president Mohammed Morsi, Turkish prime minister Recep Tayyip Erdoğan) and the emir of Qatar. The theme in Caid Essebsi’s office is Habib Bourguiba (5) — as a bust, a large poster on the wall and a framed photo on Essebsi’s desk. For Ghannouchi (whom Bourguiba wanted to condemn to death), Bourguiba — the “supreme fighter” and founder of modern Tunisia — is the man who engaged in “the war against Islam and Arabness” (6).

‘Tunisia has never reneged on its debt’

The differences between the two men are far less pronounced on the big economic issues. On the repayment of the foreign debt incurred by Ben Ali and in part siphoned off by members of his clan, Caid Essebsi told me: “People talk about the debt, but it isn’t catastrophic, since it’s under 50%. Other countries such as France have a ratio of 85%” (7). He added quickly that “a country with self-respect pays its debts, whoever’s in power. Since independence, Tunisia has never reneged on its debt.” This is what Ghannouchi told me the day before: “Tunisia has a longstanding record of honouring its debts. We shall abide by it.”

Servicing its debt is a heavy burden for this poor country: it is the third largest item in Tunisia’s budget (4.2bn Tunisian dinar, $2.66bn, in 2013). The second largest item, at 5.5bn dinar ($3.48bn) in 2013, is the Caisse Générale de Compensation (CGC), a subsidy scheme for food and energy. Everyone would like to reduce it, but no one knows how, and on this there is little to choose between the Islamists and their opponents. Their caution is understandable: it is an incendiary subject.

The CGC was established in 1970. Since then, rising world oil and grain prices have pushed its cost to exorbitant levels. The IMF has repeatedly asked for it to be reduced, pending its abolition; but Tunisia’s political parties fear inflation and revolution if they comply. The CGC is not a social policy achievement; Ben Cheikh pointed out that its main aim was making politically sustainable a neoliberal strategy to encourage industry by providing low-cost labour. To attract investors, Tunisia accepted that the state should fund some of the living costs of workers. So for over 40 years, workers in textiles and mechanical and electrical industries have not received a decent salary but have been able to buy subsidised flour and petrol. As has everyone else. The pasta and couscous in tourist restaurants and hotels is subsidised, as are the fuel bills for gas-guzzling Libyan vehicles and the energy (often imported) used by Spanish and Portuguese cement works. Ghannouchi acknowledged that it is “a great burden on our budget,” and said: “We need to find a reasonable solution, not because of pressure from international institutions, but because the expense cannot be sustained at this level.” Caid Essebsi agreed: “We have now reached a critical point. It would be better to revise the budget in favour of other priorities.”

But how can CGC costs be redirected to productive investment in regions of the interior without immediately harming the most deprived Tunisians whom the state has no other way of helping? When this subject is raised — under pressure — by bosses, unionists, Islamists and Nidaa Tounes, they seem content to wait and see. They criticise abuses without proposing solutions. When asked if a future government might abolish the CGC, Wided Bouchamaoui, the chairman of Utica (the Tunisian Union for Industry, Commerce and Artisanship, the employers’ organisation), said: “Never! There would be riots across the country. No political force would dare to do it.” She added: “That’s not what we are asking for.”

‘Most people don’t have a car’

Two-thirds of the CGC goes on petrol. But, says Houcine Abassi, chairman of the UGTT (Tunisian General Labour Union), “most people don’t have a car, whether they’re employed or not. So they don’t benefit from the energy subsidy. And when middle-class people do have a vehicle … they pay the same for their petrol [1.57 dinar ($2.66) per litre] as those who have four or five luxury cars in one family.” Assuming that the problem really stems from subsidising billionaires’ limousines, how should one go about solving it? “That,” Abassi told me, “is the government’s responsibility. We have suggestions, but we’re a union, not the state, with its resources, experts and consultancies. It’s up to them to look for a strategy.”

The Popular Front does have a detailed economic plan. It includes the recruitment of extra civil servants to the finance ministry to fight fraud and smuggling, a 5% tax on the net profits of oil companies, the suspension of payments servicing foreign debt pending an audit, a tax revision in favour of lower earners, and an end to banking secrecy. But when it comes to the CGC, their plan is less bold. “Everyone,” Hammami said, “knows the compensation fund is untouchable.” The government is discreetly beginning to pare back subsidies, especially on fuel costs, and everyone is looking the other way, towards the upcoming election.

On the political level, confrontations were suspended after the new government was formed but the fight went on by other means. The current consensus depends on a fragile balance of power. Tentative future alliances try to anticipate the results of the election. Ghannouchi uses this uncertainty and the regional instability to convince his often-sceptical grassroots support of the wisdom of his conciliation strategy. Judging the country “too fragile” for a confrontation between government and opposition, he wants the election to produce “if possible, a coalition with everyone” or, failing that, “with as many parties as possible. Not just a simple majority, but [a coalition that includes] civil society, the unions, and bosses’ organisations. Ennahdha would be part of any government.”

Caid Essebsi appears to be in a position of strength. The group he leads is diverse — a mixture of networks of Ben Ali sympathisers and union and progressive activists (the secretary general of Nidaa Tounes, Taieb Baccouche, was secretary general of the UGTT) — but it occupies the centre stage. The Islamist party is seeking a national union without excluding anyone; the Popular Front wants to counter what Hammami calls the “despotic danger of Ennahda” by continuing its joint action with Nidaa Tounes. What will Nidaa Tounes decide to do? As Caid Essebsi described his role in the search for a “consensual solution” with Ghannouchi, while praising the current government “supported by all political forces”, I got the impression that he would prefer the base of the next cabinet to be equally broad. And not reject the Islamists in the opposition? “That depends on the election. But we will respect the outcome.”

“There are fears that Nidaa Tounes will form an alliance with Ennhada,” said Abdelmoumen Belanes, deputy secretary general of the Workers’ Party, part of the Popular Front. “The West’s idea is that there are two great forces and that stability requires them to form an alliance.” The fear the Islamists inspire in the left is undiminished. “Since its creation, Ennahda’s tactics have remained the same,” Hammami said. “Where it meets resistance, it pulls back. But where there is opportunity, it pushes forward. But the aim remains to Islamise, to impose the Muslim Brothers’ line, which is regressive, despotic and dictatorial.” The strategy he advocates follows from this diagnosis: the anti-Islamist alliance must continue, and invoke the priority of democracy; it must be made clear that achieving this priority requires urgent social measures; and it must be affirmed that all “democratic” forces are “in agreement about the necessity of mitigating the consequences of the economic crisis on the masses.”

But, asked Michael Ayari, a researcher at the International Crisis Group, what do the grassroots think? And the activists? Those in Ennahda, who saw their party relinquish power without losing an election? Those in Nidaa Tounes, whose chairman has not ruled out governing with the Islamists, to the delight of the IMF? Those of the Popular Front, who have been asked to defend democracy alongside the bosses and former Ben Ali supporters? Party leaders are busy forging alliances, anticipating the allocation of jobs and soothing investors. And political equilibrium results, which is reasonable, even enviable, in a region still convulsing. But how long can it last if, three years after the “revolution”, the social and economic issues that provoked it remain unaddressed?

(2) “For freedom, justice and development in Tunisia”, Ennahda manifesto, Tunis, September 2011.

(3) According to Ben Cheikh, only six medium or large companies are based in Siliana, whereas in Manouba, 100km away, there are 322.

(4) For example, Dominique Strauss-Kahn said in November 2008, when head of the IMF: “The economic policy being pursued [in Tunisia] is healthy, and I think it is a good example for developing countries.”

(5) Habib Bourguiba (1903-2000) was a central figure in Tunisia’s independence movement and was the country’s first prime minister (1957-87).

(7) Tunisia’s national debt is 46% of GDP. The French figure is 93.4%.

Translated by George Miller

This article appears in the excellent Le Monde Diplomatique, whose English language edition can be found at mondediplo.com. This full text appears by agreement with Le Monde Diplomatique. CounterPunch features two or three articles from LMD every month.